Customer value and satisfaction


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Customer value and satisfaction

  1. 1. Building Customer Satisfaction, Value and Retention Prof.Prasanna Venkatesh
  2. 2. Chapter Objectives <ul><li>In this chapter, we will address the following questions: </li></ul><ul><ul><li>What are customer value and satisfaction, and how can companies deliver them? </li></ul></ul><ul><ul><li>What makes a high-performance business? </li></ul></ul><ul><ul><li>How can companies both attract and retain customers? </li></ul></ul><ul><ul><li>How can companies improve both customer and company profitability? </li></ul></ul><ul><ul><li>How can companies practice total quality management? </li></ul></ul>
  3. 3. Defining Customer Value and Satisfaction <ul><li>Customer Perceived Value (CPV) </li></ul><ul><ul><li>Total customer value </li></ul></ul><ul><ul><li>Total customer cost </li></ul></ul>
  4. 4. Determinants of Customer Delivered Value
  5. 5. <ul><li>Total Customer Satisfaction </li></ul><ul><ul><li>Satisfaction </li></ul></ul><ul><li>Customer Expectations </li></ul><ul><li>Delivering High Customer Value </li></ul><ul><ul><li>Value proposition </li></ul></ul><ul><ul><li>Value-delivery system </li></ul></ul><ul><li>Measuring Satisfaction </li></ul>Defining Customer Value and Satisfaction
  6. 6. Tools for Tracking and Measuring Customer Satisfaction Complaint and suggestion systems: Customer satisfaction surveys: A customer-centered organization makes it easy for customers to register suggestions and complaints. Some customer-centered companies—P&G, General Electric, Whirlpool—establish hot lines with toll-free numbers. Companies are also using Web sites and e-mail for quick, two-way communication. Studies show that although customers are dissatisfied with one out of every four purchases, less than 5 percent will complain. Most customers will buy less or switch suppliers. Responsive companies measure customer satisfaction directly by conducting periodic surveys. While collecting customer satisfaction data, it is also useful to ask additional questions to measure repurchase intention and to measure the likelihood or willingness to recommend the company and brand to others.
  7. 7. Premier is a special business-oriented part of the Dell Web site that allows customers to interact with Dell and customize all phases of doing business with Dell.
  8. 8. The Nature of High Performance Business <ul><li>High-performance business </li></ul>
  9. 9. The High Performance Business
  10. 10. The Nature of High Performance Business <ul><li>Stakeholders </li></ul><ul><li>Processes </li></ul><ul><li>Resources </li></ul><ul><ul><li>Core competency </li></ul></ul><ul><ul><li>Distinctive capabilities </li></ul></ul><ul><li>Organization and Organizational Culture </li></ul><ul><ul><li>Organization </li></ul></ul><ul><ul><li>Corporate culture </li></ul></ul><ul><ul><li>Scenario analysis </li></ul></ul>
  11. 11. Delivering Customer Value and Satisfaction <ul><li>Value Chain </li></ul><ul><ul><li>Value chain </li></ul></ul>3-
  12. 12. The Generic Value Chain 3-
  13. 13. Delivering Customer Value and Satisfaction <ul><ul><li>Benchmarks </li></ul></ul><ul><li>Core Business Processes </li></ul><ul><ul><li>The market sensing process </li></ul></ul><ul><ul><li>The new offering realization process </li></ul></ul><ul><ul><li>The customer acquisition process </li></ul></ul><ul><ul><li>The customer relationship management process </li></ul></ul><ul><ul><li>The fulfillment management process </li></ul></ul>
  14. 14. <ul><li>The Value Delivery Network (Supply Chain) </li></ul>Delivering Customer Value and Satisfaction
  15. 15. Attracting and Retaining Customers <ul><li>Partner relationship management (PRM) </li></ul><ul><li>Customer relationship management (CRM) </li></ul>
  16. 16. Attracting and Retaining Customers <ul><li>Attracting Customers </li></ul><ul><li>Computing the Cost of Lost Customers </li></ul><ul><ul><li>Customer churn </li></ul></ul><ul><ul><li>Customer defection rate </li></ul></ul><ul><ul><li>Lifetime value </li></ul></ul>
  17. 17. Attracting and Retaining Customers <ul><li>The Need for Customer Retention </li></ul><ul><li>Measuring Customer Lifetime Value (CLV) </li></ul><ul><li>Customer Relationship Management (CRM): The Key </li></ul><ul><ul><li>Customer equity </li></ul></ul><ul><ul><li>Three drivers of customer equity </li></ul></ul><ul><ul><ul><li>Value equity </li></ul></ul></ul><ul><ul><ul><li>Brand equity </li></ul></ul></ul><ul><ul><ul><li>Relationship equity </li></ul></ul></ul>
  18. 18. The Customer-Development Process 3-
  19. 19. Attracting and Retaining Customers <ul><li>Five levels of investment in customer relationship building </li></ul><ul><ul><li>Basic marketing </li></ul></ul><ul><ul><li>Reactive marketing </li></ul></ul><ul><ul><li>Accountable marketing </li></ul></ul><ul><ul><li>Proactive marketing </li></ul></ul><ul><ul><li>Partnership marketing </li></ul></ul>
  20. 20. Attracting and Retaining Customers <ul><li>Forming Strong Customer Bonds: The Basics </li></ul><ul><ul><li>Cross-departmental participation </li></ul></ul><ul><ul><li>Integrate the Voice of the Customer into all business decisions </li></ul></ul><ul><ul><li>Create superior offering for the target market </li></ul></ul>
  21. 21. <ul><ul><li>Organize and make accessible a database of customer information </li></ul></ul><ul><ul><li>Make it easy for customers to reach the appropriate personnel </li></ul></ul><ul><ul><li>Reward outstanding employees </li></ul></ul><ul><li>Adding Financial Benefits </li></ul><ul><ul><li>Frequency programs (FPs) </li></ul></ul>Attracting and Retaining Customers
  22. 22. Attracting and Retaining Customers <ul><li>Adding Structural Ties </li></ul><ul><ul><li>Create long-term contracts </li></ul></ul><ul><ul><li>Charge lower price to high volume customers </li></ul></ul><ul><ul><li>Turn product into long-term service </li></ul></ul>
  23. 23. Customer Profitability, Company Profitability, and Total Quality Management <ul><li>Measuring Profitability </li></ul><ul><ul><li>Profitable customer </li></ul></ul>
  24. 24. Customer-Product Profitability Analysis
  25. 25. Allocating marketing investment according to customer value
  26. 26. Customer Profitability, Company Profitability, and Total Quality Management <ul><li>Increasing Company Profitability </li></ul><ul><ul><li>Competitive advantage </li></ul></ul><ul><li>Implementing TQM </li></ul><ul><ul><li>Total Quality Management </li></ul></ul><ul><ul><ul><li>Quality </li></ul></ul></ul>
  27. 27. Thank you